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Milton, who resigned as chairman in September, was freed on a $100 million bond secured against two of his Utah properties valued at $40 million. He is barred from contacting investors and was issued travel restrictions by the court. It was his first major appearance since resigning from the company and deleting his social media accounts.
A federal grand jury charged Milton with three counts of criminal fraud for lying about “nearly all aspects of the business” to bolster stock sales of the electric vehicle start-up, according to an indictment unsealed Thursday.
Milton’s lawyers vehemently defended his innocence.
His legal team, led by Brad Bondi, said that Milton was “wrongfully accused following a faulty and incompetent investigation,” and that justice won’t be served until he’s exonerated, according to an emailed statement sent Thursday.
Read the full statement from Milton’s legal team:
Trevor Milton is innocent; this is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified.
Trevor Milton is an entrepreneur who had a long-term vision of helping the environment by cutting carbon emissions in the trucking industry.
Mr. Milton has been wrongfully accused following a faulty and incomplete investigation in which the government ignored critical evidence and failed to interview important witnesses.
From the beginning, this has been an investigation in search of a crime. Justice was not served by the government’s action today, but it will be when Mr. Milton is exonerated.
John Coffee, a securities law professor at Columbia University, said it would likely be in Milton’s best interest to seek a plea deal. He said the claims made by federal prosecutors “are not nuanced ones over which there can be a reasonable argument.”
“If he is rational, Mr. Milton should seek a plea bargain,” he said in an email to CNBC.
That’s not likely to happen, according to Yale law professor Jonathan Macey, who’s working as a paid consultant for Milton’s defense team. He expects Milton will “mount a vigorous defense,” he said.
Milton has made “some footfalls, but in general, he’s told the truth,” Macey told CNBC. “He’s an optimistic entrepreneur. People who are CEOs or chairman of companies, which of course he was … are often very optimistic and, I think, that kind of occupational hazard is being prosecuted in this case.”
Milton is charged with two counts of securities fraud and one count of wire fraud. The securities fraud counts carry maximum penalties of 20 and 25 years in prison, respectively. The wire fraud count carries a maximum penalty of 20 years in prison.
The grand jury said Milton should forfeit all property “traceable to the commission of said offenses,” which would likely include the more than $1 billion he earned when Nikola went public in June 2020.
Nikola’s stock plunged 15.2% to $12.03 a share Thursday. That’s a steep drop from its all-time high of $93.99 on June 9, 2020, days after the company went public.
The Securities and Exchange Commission also filed civil securities fraud charges against Milton on Thursday. The SEC asked the U.S. District Court for the Southern District of New York to permanently bar him from acting as an officer at a company that issues securities, to disgorge all ill-gotten gains and pay a fine.
Read More: Nikola founder Trevor Milton pleads not guilty to fraud charges